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A concept of team work and human resource management | AccountingWEB | The latest employment law changes coming into force
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The latest employment law changes coming into force

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From national minimum wage increases to flexible working requests and holiday pay, Owen Dear rounds up the latest employment law changes which accountancy firms, and their clients, need to consider. 

22nd Apr 2024
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The start of the new financial year brings with it a huge amount of change across all areas of any business, and the areas of HR and employment regulation are no exception.

But with a general election too before the end of this financial year, April 2024 has seen some additional more notable changes than in some recent times.

All of these will have a direct impact upon workers and employees in the world of accountancy, but many will also have a significant effect on clients and their businesses.

Here are some of the most significant ones that now apply.   

1. Statutory minimum/maximum payments

We have seen bigger than recent increases to the National Minimum Wage (NMW), family pay, and the payments that may have to be made at the end of the employment relationship.

This follows the increases to the advisory fuel rates announced by HMRC with effect from March, as well as the trebling of the fines (in some cases)  imposed for breaches of the right to work civil penalty scheme.

The NMW increases to £11.44 per hour, and is extended to workers aged 21 and over (previously 23 and over). For apprentices and 16 and 17 year olds, the figure increases to £6.40, and for 18-20 year olds it is £8.60.

Maternity pay, paternity pay, and pay for shared parental leave increases to £184.03 per week, and statutory sick pay rises to £116.75 per week.

For accountants, working with clients looking to make redundancies a “week’s pay” used for redundancy pay calculations has increased to a maximum of £700, and the cap on compensation for unfair dismissal claims rises to £115,115 (or 52 weeks’ salary, whichever is lower).  

2. Holiday pay for irregular hours and part-year workers

For firms providing payroll services, an equally significant change may be that, for variable hours workers’ holiday entitlement and holiday pay for any pay period can once again be calculated by multiplying the number of hours worked in that period by 12.07%. This final figure can also be paid as “rolled up holiday pay”, provided that it is shown as a separate line on their payslip.

These regulations, reinstating this method of calculating the holiday entitlement for such workers, end a period of uncertainty and confusion on the issue.

3. Extended redundancy protection for pregnant women and new parents

 It is important to remember that it is possible to make a pregnant woman, or new parent on any form of family leave, redundant without that being unfair or discriminatory. Employers must be mindful that new parents have a right to be offered a suitable alternative role (where such a role exists) above other employees and without a competitive recruitment process. April has seen this right being extended so that it lasts, in the case of pregnant women, from the time they inform their employer that they are pregnant, for a period of 18 months from the date a child is born, or placed for adoption.

Although statistically not used as frequently as maternity leave, employers should remember that these rights apply equally to all new parents returning from shared parental leave and adoption leave also.

4. Flexible working requests

The right to make a flexible working request has been enhanced, and the process for responding to such a request has been amended. Contrary to some government claims, this does not mean that all flexible working requests (including requests to work from home) have to be granted.

Under the new rules, employees have a right to make a flexible working request from day one of their employment (at present, employees must wait 26 weeks). In turn, employers must respond to that request within two months (rather than three), and must not refuse the request without first engaging with the employee and discussing it with them.

The request may still be refused for the same business reasons, but employees will now have the right to make two requests (instead of one) within a twelve month period.

We have seen a rise in demand to support these requests across our clients including those in financial services with more businesses trying to encourage more working hours in the office.

5. Carer's leave

Employees (not workers) who have caring responsibility for a dependant will have a right to one week’s unpaid leave per year to provide that care.

A “dependant” includes a spouse, civil partner, parent, child, or person who lives with the employee or who reasonably relies upon the employee for care. They will be deemed to have a long term care need if they suffer from a physical or mental illness or injury and are likely to require care for three months or more, or if they suffer from a disability or issues related to old age.

The leave can be taken as a block of one week, individual days or half days, and employees will need to give notice of at least twice the number of days that they wish to take.  Employees will not have to provide evidence of the condition the dependant has to require the employee’s care.

Other changes coming up this year likely to impact accounting business clients including changes to the rules of TUPE, the requirement for all tips to be passed on to staff for businesses in hospitality and a right of zero-hour workers to request a stable working arrangement.

It will be interesting to see how the inevitable election impacts the government’s plans.

Replies (5)

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By FactChecker
22nd Apr 2024 23:42

Mostly a lot of hot air, which isn't the fault of the author, but nevertheless illustrative more of the increase in admin (rather than direct employment costs) that are the hallmark of govt interference in employment matters.

The biggest volume of hot air surrounds the whole arena of Flexible Working Requests which, from their inception nearly 30 years ago, have been mis-reported by most media who ignore the critical 3rd word - i.e. they are only Requests.
The regs can surround these requests with an ever-increasing burden of procedural rules for how to handle the Requests, but (as not reported most of the time) there has *always* been a simple 'out' for an ER who wishes to deny the Request.
[Congratulations to the author for admitting this, albeit not too loudly.]

And then there's Carer's Leave which, like so many other types of 'special' Leave invented during this century, again looks better than it really is (from the EE's perspective).
Nice to know you can take a week off work (without your ER dismissing you for non attendance) in order to care for a frail, possibly disabled, dependent - but not many can afford to do so without pay.

As I said ... more rules ... more ways to trip up the ER .. but little extra beneficial for EEs ... has a familiar ring to it doesn't it?

Thanks (2)
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By SuperAccountingSteve
23rd Apr 2024 10:52

Costs an employer at least £25K annually to employ anyone (asssuming over 21yrs> old) for any duties, this is £10k more in real terms than i was paid aged 23,(27 years ago)for working as trainee management accountant, for a large corporate. I cant but think that unemployment will be the consequences, and business closures, a lot of businesses are predicated on cheap labour. I prefer the market, i.e. employees that are not happy with £15k get themselves up the ladder. There is so much money for labour, so these raises will come from other employees pockets , or businesses will close. Only the thin blue line of well off corporates, can take it in their stride.

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By Cylhia66
24th Apr 2024 05:30

"holiday entitlement and holiday pay for any pay period can once again be calculated by multiplying the number of hours worked in that period by 12.07%. This final figure can also be paid as “rolled up holiday pay”, provided that it is shown as a separate line on their payslip".

May I ask when this becomes enforceable? The HMRC website has not been updated with this information as far as I can see.

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Replying to Cylhia66:
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By FactChecker
24th Apr 2024 14:32

1st of *this* month (as in a holiday year that starts on or after that date).

BTW the 12.07%/rolled-up option is of course merely a min standard that you are once again allowed to use (i.e. you can pay anything you like that is more generous).
But, more importantly, it is specifically meant to be used for EEs who are hourly-paid and almost certainly on 'irregular hours' (or only employed for part of the year).

https://www.gov.uk/government/publications/simplifying-holiday-entitleme...

Thanks (2)
Replying to FactChecker:
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By Cylhia66
24th Apr 2024 14:49

Thank you so much. Appreciate the link. Very helpful. I failed to find it when I searched. Many thanks.

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